The expanded role of governments means that taxpayers will pay more for public services - and will demand more in return. To meet these expectations, the public sector must transform itself.
Long before governments around the world faced the current economic crisis, they wrestled and still are with many difficult and complex challenges - health care, social security, education, national security, crime and critical infrastructure. The demands on public services were growing along with the burden on taxpayers, and there was no long-term certainty about how to pay the bill. Several countries ran large budget deficits, raising already high levels of public debt.
In recent months, the pressures on governments have multiplied further as a result of a potent cocktail of interlocking emergencies - the financial and economic crises, major shifts in energy prices, climate change, food supplies, and natural resources. The combined effects threatened economic and social breakdown as consumers suffer and unemployment and poverty rise. Even the viability of capitalism has been questioned.
Whatever the public sector's role has been in creating these crises, few doubt that it has a critical role in resolving them. Governments are not only intervening to an unprecedented degree in private markets - with government provisions of a financial safety net for banks and other financial institutions to rescue or reinforce banks, insurance companies, among others - but also accumulating financial covenants that threaten their long-term solvency in the process. Indeed, at a time when they have limited political, social, and financial room for manoeuvre, they are taking on a whole range of tasks beyond the scope of traditional policy and public services.
So now more than ever, governments must discharge their functions proficiently, efficiently and effectively. But few of them have an established track record or reputation for managerial excellence. Indeed, their historical performance of running departments and agencies often arouse scepticism. Many public officials, knowing this, seek to reform the way government works.
These reforms typically fall short: with few exceptions, they skim the surface, cover too little ground, take too long, and leave much of the public sector relatively untouched. That's why there is a need for broader, deeper and faster reforms: what we call whole-government transformation. The current crises provides both the necessity and the chance to improve the machinery of the state fundamentally - a challenge of vast scale and urgency.
Our New Zealand government is just beginning to scratch the surface with their plans to reform our public sector.
Long before governments around the world faced the current economic crisis, they wrestled and still are with many difficult and complex challenges - health care, social security, education, national security, crime and critical infrastructure. The demands on public services were growing along with the burden on taxpayers, and there was no long-term certainty about how to pay the bill. Several countries ran large budget deficits, raising already high levels of public debt.
In recent months, the pressures on governments have multiplied further as a result of a potent cocktail of interlocking emergencies - the financial and economic crises, major shifts in energy prices, climate change, food supplies, and natural resources. The combined effects threatened economic and social breakdown as consumers suffer and unemployment and poverty rise. Even the viability of capitalism has been questioned.
Whatever the public sector's role has been in creating these crises, few doubt that it has a critical role in resolving them. Governments are not only intervening to an unprecedented degree in private markets - with government provisions of a financial safety net for banks and other financial institutions to rescue or reinforce banks, insurance companies, among others - but also accumulating financial covenants that threaten their long-term solvency in the process. Indeed, at a time when they have limited political, social, and financial room for manoeuvre, they are taking on a whole range of tasks beyond the scope of traditional policy and public services.
So now more than ever, governments must discharge their functions proficiently, efficiently and effectively. But few of them have an established track record or reputation for managerial excellence. Indeed, their historical performance of running departments and agencies often arouse scepticism. Many public officials, knowing this, seek to reform the way government works.
These reforms typically fall short: with few exceptions, they skim the surface, cover too little ground, take too long, and leave much of the public sector relatively untouched. That's why there is a need for broader, deeper and faster reforms: what we call whole-government transformation. The current crises provides both the necessity and the chance to improve the machinery of the state fundamentally - a challenge of vast scale and urgency.
Our New Zealand government is just beginning to scratch the surface with their plans to reform our public sector.
Courtesy of John Key Blog Set
There are relatively few instances of governments taking an integrated approach to reform, but those few illustrate the scale of the opportunity, especially for raising productivity. Under the prime ministership of Göran Persson, for instance, Sweden’s government responded to its mid-1990s budget crisis by shaving 11 percent from operational budgets, with no apparent damage to performance, and then maintained tight control over future spending.
Göran Persson: Sweden’s former prime minister
Vital statistics
Born January 20, 1949, in Vingåker, Sweden
Education
Studied social science at Örebro University, Sweden
Awarded honorary doctorates in medicine from Örebro University, Sweden (2004); in political science from Dankook University, South Korea (2004); and in political science from Tbilisi State
University, Georgia(2006)
Career highlights
• Prime Minister
(1996–2006)
• Finance Minister
(1994–96)
• Minister of Schools, Ministry of Education
(1989–91)
• Municipal Commissioner of Katrineholm
(1984–89)
• Member of parliament
(1979–84 and 1991–2007)
Fast facts
• Serves as chairman of the board for Sveaskog, Sweden’s largest forest owner
• Is a part time consultant and lecturer
• Runs a small cattle and wood farm in Sörmland County, Sweden
Göran Persson has lived a story that should encourage leaders around the world: how to stay in power while pursuing a harsh crisis programme that requires sacrifices throughout society.
Reforming the public sector in a crisis:
Government leaders around the world face a daunting dual challenge: they must control and, in the long term, slash major budget deficits fuelled by the economic crisis while at the same time
improving the performance of the public sector so that it can meet its complex and ever-rising obligations.
Former Swedish prime minister Göran Persson is no stranger to that challenge. Even his political foes recognize his achievement.
In the early 1990s, Sweden suffered its deepest recession since the Great Depression. Although the Swedish crisis was home-grown, its causes and effects resemble the events unfolding in the world today. After years of strong domestic growth driven by easy credit and high leverage, a real-estate bubble burst, leading to the collapse and partial nationalization of the banking sector. Domestic demand plunged as the household savings ratio soared by 13 percentage points. In
three years, public debt doubled, unemployment tripled, and the government budget deficit increased tenfold, to more than 10 percent of GDP, the largest in any OECD country at the time.
Persson was appointed finance minister when the Social Democrats returned to power, after the 1994 elections, and became prime minister two years later. In order to regain the confidence of
international lenders—and so pave the way for stability and sustainable growth—he knew that Sweden had to reduce its budget deficit dramatically. It took four years for the Swedish government to balance its budget. By 2006, when Persson and his party lost power in the general elections, the country had almost halved its public debt, to just above 40 percent of GDP.
So, what does it take to put troubled state finances in order? and, at the same time, trying to improve the way the public sector works.
What is the prerequisite for implementing a successful crisis programme?
Göran Persson: The electorate must understand that drastic measures are required. A crisis programme will hurt, and you will need a mandate from the voters if you are to succeed. This makes it difficult for an administration that is in power without such a mandate to take the lead. But it is a fantastic chance for the opposition, provided that there is broad awareness of the gravity of the situation. My party was elected in 1994 because we promised to carry out the harshest programme with the deepest budget cuts and the sharpest tax increases.
Incidentally, today on Q & A, I heard Bill English, I’ve also heard John Key say this as well. That they both believe that they have the Mandate to partially sell-off our assets, as in our Energy Entities (assets) – because in their minds, because their National Party was re-elected and that they had campaigned on their partial sell-off, of our Energy assets to the New Zealand voter, that this gives them the right to go ahead – They only received 47 per cent of the votes, I would hardly call that a Mandate. The New Zealand public who owns these assets were quite explicit in voicing their opposition to these partial sell-offs via various media and social platforms long before the General Election back in November 2011.
Only a referendum (where we Kiwi’s speak with one voice), would give the government the answer and I would wager that the government would not get the go ahead – and they both know it! We are a Democratic country not a Communist country. Why should I purchase shares in an energy company that I am already a shareholder in? The truth is the government want foreign outside interests to buy into our Energy companies and their rhetoric on Mum’s and Dad’s get first option is just that rhetoric. What disposable income Mum’s and Dad’s have if any, has to be prioritised in just living from day to day, or week to week for many Kiwi families – Many have lost or will be losing their employment. Only the select wealthy of New Zealanders’ will be able to purchase shares and no doubt in bulk as well.
I do believe however, that we need to be proficient (highly skilled), firstly, in order to be efficient and to be effective. Proficiency seems to be absent from both John Key and Bill Englishs’ Recipe of Reforms goodness knows there hasn’t been a lot of proficient public sector management especially from within the ‘Treasury’ the “lead advisors” to the government, so sayeth Gabriel Mclouf, the apparent wise councillors, so sayeth Siena...Not! Ever noticed how many things come in threes?
Like for example, Einstein's Three Rules of Work: 1) Out of clutter find simplicity; 2) From discord find harmony; 3) In the middle of difficulty lies opportunity.
--Albert Einstein
So 1) Proficiency leads to 2) Efficiency that hopefully should lead to 3) Effectiveness.
Smarty Panties aren’t I?
What advice would you give leaders or incumbent leaders who don’t have a mandate from the voters for instituting radical reform?
Göran Persson: You have to make it absolutely clear that you are putting your office at stake; that you are prepared to call new elections or, if your parliamentary group is not behind you, to resign. The forces working against a harsh crisis programme are very strong—almost every area of the public sector has its own vested interests—so any sign that you might waver in your commitment will doom the programme to fail.
Please summarize the lessons you have learned about leading, designing, and implementing the process for putting state finances in order.
Göran Persson: First, it is extremely important to be in the driver’s seat. You must make it clear that you are responsible for the process and that you are prepared to put your position at stake. Second, the consolidation programme must be designed so that the burdens are shared fairly. Public-sector cuts will hurt the most vulnerable people in society, so those who are better off need to contribute—for example, by paying higher taxes. Public support for tough policies would quickly deteriorate if they were not perceived as fair, and parliament would lose the political will to make hard decisions. Third, the consolidation programme has to be designed as a comprehensive package; if you are in as deep trouble as we were, an ad-hoc hodgepodge of measures will only have a limited chance of success. Moreover, by presenting the measures together, it becomes clear to all interest groups that they are not the only ones being asked to make sacrifices. It also has to be a front-loaded program. By starting with the most difficult measures, you demonstrate your resolve and increase the chances of achieving the early results, which will be important for getting the continued support that is critical for sustaining the effort.
Transparency is the fourth lesson. You must never play down the effects of the programme’s measures. On the contrary, remind the public again and again that this will hurt. It is one thing to get support in parliament for the programme; it’s another to stay in control during the
implementation phase, when the measures become real for ordinary people in their daily lives. You must also be completely honest when you communicate with financial markets. Clarify assumptions and calculations. Don’t use any bookkeeping tricks. Only then can you recover credibility; only then can the programme earn legitimacy. Indeed, you should always go for conservative estimates. If, for instance, you estimate that economic growth will be 1.5 percent and you end up with 2.5 percent, you will have solved much of the credibility problem.
The electorate’s patience is never endless. How much time do you have until it runs out?
Göran Persson: You have two years. If you are not in command of the process by then, you will lose momentum and soon face the next election—where you will be replaced. We survived the 1998 election and were rewarded politically for what we had done by being re-elected once more in 2002, when the good times returned and we were in firm control of the public finances.
Cutting the state budget during a crisis puts pressure on the public sector at a time when its services are perhaps more important than ever. How did you handle this problem?
Göran Persson: Restoring the health of our public finances was the prerequisite for preserving the Swedish public sector in the long term, and this would not have been possible without sacrifices. One-third of our programme consisted of tax increases, and two-thirds of spending cuts, both in the operational budgets of the central and local authorities and in the legislated levels of welfare transfers. We cut pensions, sick-leave compensation, and unemployment benefits, which hurt people who already had only small margins in their household finances. That shouldn’t have been necessary in an ideal world, because lower welfare transfers reduced domestic demand and tax
revenues and thus had a negative impact on growth and employment and a small net effect on the budget. But we had no choice. High interest rates made it necessary to regain the confidence of investors all over the world whose perception was that Sweden’s generous welfare model was to blame for the crisis. In fact, it wasn’t until we cut unemployment benefits and got into open conflict with the trade unions that market interest rates started coming down.
It’s often said that with a crisis comes an opportunity for reform. Did you use this opportunity to improve the long-term performance of the public sector?
Göran Persson: Yes, the cuts in government consumption became a driver of improved efficiency, since public authorities were forced to do the same job on unchanged or reduced budgets.
In addition, we pursued targeted policies with various objectives. One strategy—aiming to improve productivity, service quality, and freedom of choice—involved the liberalization of telecommunications, mail, railways, and other infrastructure industries. It also involved allowing privately run providers to compete with public ones in providing tax-financed services for the school system, health care, child care, and care for the elderly.
Another measure was to introduce information technology to broad layers of the population through a tax-deduction scheme that allowed workers to obtain a home computer under a favourable leasing agreement with their employers. The penetration of IT in Sweden during these years outpaced every other country in the world, which made it possible for authorities like the Tax Agency to go online at an early stage. Indeed, I’m quite confident today that information
technology improves government productivity as well as the delivery of its services. More and more of the communication between Swedish public agencies and citizens now takes place on the Web, and many Swedes do their annual tax submissions over the Internet, allowing for a very efficient processing of taxes. I think our tax agency is one of the most efficient in the world and very much so because we are using modern technologies. We have one of the world’s largest public sectors and, along with the Danes, the world’s highest taxes, claiming almost 50 percent of GDP. We are also very good at collecting these taxes.
A third strategy was to give people with basic schooling the chance to complete a secondary education that would qualify them for university studies. It was a straightforward system: an employed worker would get the equivalent of the unemployment benefit if he or she entered an
adult-education program and if the employer agreed to replace him or her with an unemployed person. The employer’s cost was unchanged, and the state’s cost was limited to the education itself. Believe it or not, more than 10 percent of the workforce seized this opportunity between 1997 and 2002. It was mainly women who did so, and many went on to study at a university. When the business cycle turned up again, they became a very good resource on the labour market, not least in the public sector. This education scheme served a dual purpose:
it eased the pain of unemployment and increased Sweden’s long-term competitiveness by lifting the average competence level of the workforce.
What approach did you take to set efficiency targets and drive savings across the government?
Göran Persson: We introduced three-year ceilings on public expenditure for each ministry. Within this ceiling, we gave the ministries and public agencies some flexibility to distribute their
expenditure levels between the years in each three-year frame as long as they reached their final target. These caps on expenditure were the main driving force. Sweden has a decentralized system of government, so even though we set the guidelines it was up to each authority to figure out how to fulfil its service obligations while still achieving the required spending cuts. The budget cuts for the authorities and agencies amounted to a grand total of 11 percent from 1995 to 1998. After that, we built in an efficiency factor based on productivity in the private-service sector, which the public agencies had to match. By doing so, we continued to put pressure on them to improve their efficiency and produce more or the same for less. The result was that they started to examine expenditures that they had regarded as impossible to influence—for instance the location and rental cost of their offices—and they also became more careful about whom to employ and about developing the staff they already had.
As the political leader, what was your experience with trying to get the civil servants on board and making them partners in the initiative?
Göran Persson: They had never experienced a crisis of this magnitude. Some reacted to it as a professional opportunity to perform a very significant task. Others felt betrayed by the cuts and
that it was not their role to deal with productivity or efficiency issues. In the end, though, it was quite easy to get the civil servants on board because they were all conscious of the crisis and its dangers.
Did you make many personnel changes, particularly in important positions?
Göran Persson: Only gradually and in a small way. It’s very easy to get rid of people, but it’s difficult to find new ones that you can be sure are better. So I find that it’s often wiser to stick with the staff you have. It is, after all, the politicians who are responsible for restoring order in the country’s finances, so it’s up to them to lead, support, educate, and stimulate those who carry it out. Sometimes you are successful in this regard; sometimes you fail.
Country statistical profile: Sweden 2011-2012 (including 2003 – 2010).
Unit
2003
2004
2005
2006
2007
2008
2009*
2010
Production and income
Gross domestic product (GDP) Bln USD curr. PPPs 272.5 292.4 295.3 324.0 352.1 364.0* 345.5 365.9
GDP per capita USD current PPPs 30 418 32 506 32 701 35 680 38 486 39 475* 37 155 39 013
Gross national income (GNI) per capita USD current PPPs 30 793 32 500 32 936 36 139 39 364 40 870* 37 825 39 728
Household disposable income Annual growth % 1.0 1.3 2.1 3.8 5.4 3.2* 1.6 1.4
Economic growth
Real GDP growth Annual growth % 2.3 4.2 3.2 4.3 3.3 -0.6* -5.3 5.7
Net saving rate in household disposable income % 7.2 6.1 5.5 6.6 8.8 11.2* 12.9 10.8
Gross fixed capital formation % of GDP 1.6 5.7 8.1 9.2 8.9 1.4* -16.3 7.1
Economic structure
Real value added: agriculture, forestry, fishing Annual growth % 1.0 8.2 -3.2 11.0 4.9 1.2* 0.6 -0.8
Real value added: industry Annual growth % 3.9 9.7 4.4 4.0 4.3 -5.2* -15.8 15.3
Real value added: services Annual growth % 1.1 0.8 0.6 0.6 1.0 1.0* 1.3 0.8
Government deficits and debt
Government deficit % of GDP -1.3 0.4 1.9 2.2 3.6 2.2* -0.9 -0.3
General government debt % of GDP 59.3 60.0 60.8 53.9 49.3 49.6* 52.0 49.1
General government revenues % of GDP 54.4 54.6 55.8 54.9 54.5 53.9* 54.2 52.7
General government expenditures % of GDP 55.7 54.2 53.9 52.7 51.0 51.7* 55.2 53.1
Expenditure
Public expenditure on health % of GDP 7.6 7.4 7.4 7.3 7.3 7.5* 8.2 ..
Private expenditure on health % of GDP 1.7 1.7 1.7 1.7 1.7 1.7* 1.9 ..
Public social expenditure % of GDP 30.1 29.5 29.1 28.4 27.3 .. .. ..
Private social expenditure % of GDP 2.9 2.9 3.0 2.9 2.9 .. .. ..
Public pension expenditure % of GDP 7.8 7.7 7.6 7.3 7.2 .. .. ..
Private pension expenditure % of GDP .. .. 1.0 1.1 1.3 1.2* .. ..
Net official development assistance (Aid) % of GNI 0.79 0.78 0.94 1.02 0.93 0.98* 1.12 0.97
Taxes
Total tax revenue % of GDP 47.8 48.1 48.9 48.3 47.4 46.3* 46.4 ..
Taxes on income and profits % of GDP 17.6 18.3 19.1 19.1 18.4 16.8* 16.3 ..
Taxes on goods and services % of GDP 12.7 12.6 12.8 12.6 12.6 12.8* 13.5 ..
Taxes on the average worker % of labour cost 48.2 48.4 48.1 47.8 45.3 44.8* 43.2 42.7
Trade
Imports of goods and services % of GDP 36.7 37.8 40.6 43.0 44.4 46.8* 41.9 44.1
Exports of goods and services % of GDP 43.5 46.0 48.4 51.1 51.9 53.5* 48.4 50.0
Goods trade balance: exports minus imports of goods Bln USD 18.2 22.8 18.9 20.3 16.2 16.5* 10.7 9.7
Imports of goods Bln USD 84.2 100.5 111.4 127.1 152.8 167.3* 120.2 148.4
Exports of goods Bln USD 102.4 123.2 130.3 147.4 169.1 183.9* 131.0 158.1
Service trade balance: exports minus imports of services Bln USD 1.7 5.5 7.3 9.7 15.6 16.6* 13.5 15.9
Imports of services Bln USD 28.6 33.0 35.0 39.2 47.3 53.8* 45.7 48.5
Exports of services Bln USD 30.2 38.4 42.4 48.8 62.7 70.2* 58.9 64.2
Current account balance of payments % of GDP 7.0
Foreign direct investment (FDI)
Outward FDI stocks Mln USD .. .. .. .. 332 208 322 952 347 557 336 086
Inward FDI stocks Mln USD .. .. .. .. 293 384 278 710 331 932 348 667
Inflows of foreign direct investment Mln USD .. 22 227 27 712 26 613 38 811 31 298* 26 300 31 841
Outflows of foreign direct investment Mln USD .. 12 125 11 897 28 908 27 740 37 120* 10 673 6 026
Prices and interest rates
Inflation rate: all items Annual growth % 1.9 0.4 0.5 1.4 2.2 3.4* -0.5 1.2
Inflation rate: all items non food non energy Annual growth % 0.3 -0.9 -0.1 0.5 3.2 1.3* -0.4 -0.4
Inflation rate: food Annual growth % 0.3 -0.4 -0.7 0.8 2.0 6.9* 2.9 1.4
Inflation rate: food Annual growth % 0.3 -0.4 -0.7 0.8 2.0 6.9* 2.9 1.4
Inflation rate: energy Annual growth % 13.4 4.0 4.1 7.8 -1.5 11.8* -1.7 6.8
Producer Price Indices (PPI): manufacturing Annual growth % -0.9 1.8 4.0 3.9 3.3 3.9* 1.0 0.3
Long-term interest rates % 4.64 4.43 3.38 3.70 4.17 3.89* 3.25 2.89
Purchasing power and exchange rates
Purchasing power parities SEK per USD 9.34 9.10 9.38 9.09 8.88 8.80* 8.94 9.04
Exchange rates SEK per USD 8.09 7.35 7.47 7.38 6.76 6.59* 7.65 7.21
Indices of price levels OECD = 100 119 122 124 123 127 126* 115 122
Energy supply and prices
Total primary energy supply (TPES) Mtoe 50.6 52.6 51.6 50.2 50.1 49.6* 45.4 50.8
Total primary energy supply per capita Toe per capita 5.65 5.85 5.71 5.53 5.47 5.38* 4.88 5.41
TPES per unit of GDP at 2000 prices and PPPs Toe per '000 USD 0.19 0.19 0.18 0.17 0.16 0.16* 0.16 0.17
Renewables' contribution to total primary energy supply % 24.5 25.0 28.8 28.7 30.5 31.5* 34.8 32.7
Crude oil import prices USD per barrel 28.60 36.47 51.78 62.50 70.13 95.09* 60.58 79.00
Information and Communications Technology (ICT)
ICT investment in non-residential fixed capital formation % 24.7 24.3 25.1 24.4 23.0 21.9* 24.7 ..
ICT related occupations: total employment % .. .. .. .. .. .. .. 26.5
Households with access to the Internet % .. .. 72.5 .. .. 84.4* 86.0 ..
Environment
Water abstractions Mln m3 .. .. 290 .. .. .. .. ..
Fish landings in domestic and foreign ports '000 tonnes 281 262 239 262 246 219* 197 ..
Aquaculture '000 tonnes 12 7 7 9 6 9* 9 ..
Municipal waste total '000 tonnes .. .. .. .. .. .. 4 490 ..
Municipal waste per capita Kg .. .. 480 .. .. .. 480 ..
CO2emissions from fuel combustion Mln tonnes 55 54 50 48 46 45* 42 ..
Education
Tertiary attainment in population aged 25-64 % .. .. .. .. .. .. 33.0 ..
Expenditure per student: non-tertiary, 2008 prices USD constant PPPs .. .. .. .. .. 9 524.2* .. ..
Expenditure per student: tertiary, 2008 prices USD constant PPPs .. .. .. .. .. 20 013.8* .. ..
Employment
Employment rate in population aged 15-24 % 46.1 44.0 43.3 44.8 46.8 46.4* 38.4 38.5
Employment rate in population aged 25-54 % 83.5 82.9 83.9 84.7 86.1 86.5* 84.4 85.0
Employment rate in population aged 55-64 % 69.0 69.5 69.6 69.8 70.1 70.3* 70.1 70.6
Incidence of part-time employment % 14.1 14.4 13.5 13.4 14.4 14.4* 14.6 14.0
Self-employment rate: total civilian employment % 9.6 9.9
|
9.8 10.0 10.6 10.4* 10.7 10.9
Self-employment rate: total civilian employment % 9.6 9.9
|
9.8 10.0 10.6 10.4* 10.7 10.9
Self-employment rate, men: male civilian employment % 13.9 14.3
|
14.0 14.2 14.9 14.5* 14.7 15.0
Self-employment rate, women: female civilian employment % 5.1 5.2
|
5.3 5.4 5.8 5.9* 6.2 6.4
Unemployment
Unemployment rate: total civilian labour force % 6.6 7.4 7.7
|
7.1 6.1 6.2* 8.3 8.4
Unemployment rate, men: male civilian labour force % 6.9 7.6 7.7
|
6.9 5.9 5.9* 8.6 8.5
Unemployment rate, women: female civilian labour force % 6.2 7.1 7.6
|
7.2 6.4 6.5* 8.0 8.3
Long-term unemployment: total unemployed % 17.8 18.9 .. .. 13.0 12.4* 12.8 16.6
Labour compensation and hours worked
Labour compensation per unit labour input, total economy Annual growth % 4.3 2.4 3.4 2.2 3.9 1.3* 2.3 1.1
Average time worked per person in employment Hours per year 1 582 1 605 1 605 1 599 1 618 1 617* 1 602 1 624
Research and Development (R&D)
Gross domestic expenditure on R&D % of GDP 3.80 3.58 3.56
|
3.68 3.40 3.70* 3.62 ..
Gross domestic expenditure on R&D % of GDP 3.80 3.58 3.56
|
3.68 3.40 3.70* 3.62 ..
Researchers: full-time equivalent Per '000 employed 11.0 11.2 12.7
|
12.6 10.1
|
10.5* 10.5 ..
Population
Total population '000 persons 8 958 8 994 9 030 9 081 9 148 9 220* 9 299 9 379
Population growth rates % 0.4 0.4 0.4 0.6 0.7 0.8* 0.9 0.9
Total fertility rates Children 1.7 1.8 1.8 1.9 1.9 1.9* 1.9 ..
Youth population aged less than 15 % of population 17.9 17.7 17.4 17.1 16.9 16.7* 16.6 16.6
Elderly population aged 65 and over % of population 17.2 17.2 17.3 17.3 17.4 17.6* 17.9 18.3
International migration
Net migration rate Per '000 inhabitants 3.2 2.8 3.0 5.6 5.9 6.1* 6.8 5.3
Foreign-born population % of population 12.0 12.2 12.5 12.9 13.4 13.9* 14.4 ..
Foreign population % of population 5.3 5.3 5.3 5.4 5.7 6.0* 6.4 ..
Unemployment rate of native-born men % of labour force .. .. 7.0 .. .. .. 7.5 ..
Unemployment rate of foreign-born men % of labour force .. .. 15.1 .. .. .. 16.2 ..
Unemployment rate of native-born women % of labour force .. .. 6.9 .. .. .. 6.9 ..
Unemployment rate of foreign-born women % of labour force .. .. 13.7 .. .. .. 14.5 ..
Health
Life expectancy at birth Years 80.2 80.5 80.6 80.8 81.0 81.2* 81.4 81.5
Life expectancy at birth: men Years 77.9 78.4 78.4 78.7 78.9 79.1* 79.4
Life expectancy at birth: women Years 82.5 82.7 82.8 82.9 83.0 83.2* 83.4
Infant mortality Per '000 3.1 3.1 2.4 2.8 2.5 2.5* 2.5
Overweight and obese aged 15 and over % of population 42.8 42.6 44.0 44.4 44.0 45.6* 46.3
Society
Suicide rates Per 100 000 persons .. .. .. .. .. .. 11.0
Youths 20-24 not in education nor employment % 4.2 4.8 4.7 5.3 5.4 4.4* 5.5
Youths 15-19 not in education nor employment % 11.8 13.6 13.4 15.2 13.1 12.9* 16.5
Transport
Goods transport Mln tonne-km 44 289 45 860 48 807 50 349 52 057 53 908* 45 545
Passenger transport Mln passenger-km 114 234 114 558 115 036 115 317 118 361 117 917* 119 116
Road fatalities Per mln inhabitants 59 53 49 49 51 43* 39
Göran Persson serves Göran Persson serves
as finance minister as prime minister
1994 1995 1996: Series of strict budget bills passed. The IT commission is formed in 1994 also and proposition put forward in 1996.
1997: Major labour union offers computer loans to members and the “Knowledge Lift”
adult-education programme is launched.
1998: Tax break on computer leases introduced.
2003: “ Delegation for the 24/7 Agency” established to coordinate online government efforts.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007:
• Deregulation of state monopolies
• Rapid increase in establishment of charter schools
• Devolution of financial resources to regional and local authorities
Courtesy of Source: OECD Factbook 2009: Economic, Environmental and Social Statistics, Organisation for Economic Co-operation and Development (OECD); McKinsey analysis
Did you set up some kind of machinery at the centre of government to monitor departments and agencies and to intervene, when necessary, to move things along?
Göran Persson: No, we did not. We were in such acute crisis that we had to move as quickly as we could, so we executed the programme without reflecting in detail on its implementation. We monitored two indicators very closely; one was the bottom line of the state finances and the other Sweden’s interest rate levels, because financial markets reacted very quickly to the program and its progress. If I had to do it all again, I would perhaps set up some centralized unit just to monitor
progress and to spread ideas and best practices.
Did the process lead to significant changes in the way government worked and the way it developed and delivered its services?
Göran Persson: The efficiency targets had positive consequences for public services, at both the state and local levels. At the local level, the targets encouraged public agencies to collaborate, leading to better services for the people. Similarly, as a response to the remit we gave
government agencies—such as the tax and social-security authorities— to improve their efficiency to private-sector levels, they started talking to each other and cooperating more closely than before. We didn’t plan these changes, but they were positive nevertheless.
The cabinet was another example of change. People tend to view it as a tight-knit team, but it is
not. Ministers are constantly competing with each other for the available resources. This was
not the case during the crisis. In fact, it was the only time in my 15 years as a cabinet member
when I felt that I was leading a real team where everybody was prepared to contribute and to help each other. Why? Because we all understood that the budget deficit, if left unchecked, could destroy the public sector as we knew it. We also knew that beating the crisis required us to work as a team, because if just one minister leaks to the media that his or her area of responsibility is carrying an unfair share of the burden, the whole process will soon break down. You must realize that the cabinet is one thing; the parliament, however, is something else, and you can never take the support of your parliamentary group for granted. If there is the slightest dissension between your ministers, their support groups in parliament could block bills that you are bringing to the assembly. This would be very serious. A budget-consolidation process of this kind requires not only a state budget: the budget needs to be followed by perhaps 50 or 100 different initiatives that all have to pass through parliament. So if you cannot keep your team together, you will find yourself on a very slippery slope.
What levers did you have at the centre for influencing change at ministries that were not making good on their efficiency targets?
Göran Persson: Each ministry had its own bottom-line target, and if it didn’t make good on that target there would be a discussion with the ministries’ top managers. Where needed, I or my finance minister became directly involved in discussions with departmental ministers. In doing so, we suggested ways to move forward, but we would never tell them what to do. Giving direct and detailed orders would have broken the internal ethics of the budget-consolidation process—which
we had agreed to achieve as a team. It would also have given the finance minister or prime minister ownership of somebody else’s task.
In fact, what is taught in the private sector about the importance of building well-functioning top teams applies to government as well, except that it’s harder in government. Much more transparency is required, and every little detail can become public knowledge. Moreover, your ownership of the process is under constant threat from the opposition and, perhaps, your own parliamentary group. This makes it essential to build loyalty and solidarity within your team
of ministers or else you won’t achieve anything. Political leadership is often said to be about visions and ideas. But it is also about ensuring that a transparent public organization can achieve productive results in its daily work not only once but again and again every year, and under constant external pressure.
I shall conclude with quotes from Winston Churchill whom makes me laugh...for a bit of fun!
A young man after seeing Churchill leave the bathroom without washing his hands:
“At Eton they taught us to wash our hands after using the toilet.”
Churchill: “At Harrow they taught us not to piss on our hands.”
“You can always count on Americans to do the right thing – after they’ve tried everything else.”
Lady Nancy Astor: “Winston if you were my husband, I’d poison your tea.”
Churchill: “Nancy, if I were your husband, I’d drink it.”
Churchill: “Don’t talk to me about naval tradition. It’s nothing but rum, sodomy and the lash.”
Churchill: “I only believe in statistics that I doctored myself.”
What an absolute darling of a man – Direct and to the Point.
I do hope that I will pass my examinations in Law and Public Policy...So far, so good.
GO UNITED! xx for Sir Alex XX
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